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This will be tough year to predict deals or gridlock in D.C.

Posted: Saturday, January 16, 1999

By Alan FramAssociated Press

WASHINGTON -- The prospects for the White House and Congress to strike deals this year revamping Social Security, cutting taxes and on other major issues are extraordinarily unpredictable, participants and analysts say.

The biggest wild card is the impeachment trial of President Clinton. Even assuming the Senate leaves him in office, the two sides could be left hostile and eager to vilify each other in the run-up to the 2000 elections, or yearning to cooperate and produce results to prove they can still govern.

''I could just as much write a script for a bust Congress or for a boom Congress,'' said Ellen Nissenbaum, who monitors Congress for the liberal-leaning Center on Budget and Policy Priorities.

''We don't know,'' said Sen. Chuck Hagel, R-Neb., who has pressured GOP Senate leaders to push for more legislative accomplishments. He said that although lawmakers might ''dig deep'' and work together after the trial, its aftermath will be ''a dark cloud that will hang over this country for a long time.''

Front and center is how to bolster Social Security for the retirement of the giant baby boom generation, which begins in a decade, and whether they will do it at all.

In coming days, new official projections are expected to show federal surpluses totaling about $2 trillion over the next decade. Politicians are eyeing that pot -- $500 billion more than was estimated last summer -- to pay for Social Security, tax cuts and more spending.

But there remains no consensus over how to fix the huge, politically sensitive Social Security, with Republicans generally more willing than Democrats to invest funds in the stock market. Both parties are reluctant to offer the first detailed plan for fear of withering attacks.

Underlining the political positioning under way, new House Speaker Dennis Hastert, R-Ill., plans to make H.R.1 -- House Republicans' first bill of the 106th Congress -- a blank, to prod Clinton to offer his own Social Security proposal first. Senate Majority Leader Trent Lott, R-Miss., is considering the same for S.1, the first Senate GOP bill.

In addition, Senate Budget Committee Chairman Pete Domenici, R-N.M., is crafting a budget for 2000 setting aside $1.5 trillion -- the portion of the surplus generated by Social Security revenues -- to strengthen the program. He said he was working toward using the rest, plus extra money generated by closing tax loopholes, for across-the-board tax cuts starting at 4 percent and rising gradually to 14 percent, and wants increased spending for education and defense.

Clearly, Clinton and the same Republicans trying to oust him from office will have incentives to cooperate if he survives the impeachment trial, which seems likely. That could yield a landmark pact revamping Social Security, cutting taxes and boosting spending for domestic and defense programs.

Saddled forever as only the second president impeached by the House, Clinton probably would welcome proving his relevance with solid achievements like reinforcing Social Security and beefing up federal support for schools.

Republicans, meanwhile, would be eager to avoid the label of a Congress obsessed with impeachment but achieving nothing else. If they strike a deal overhauling Social Security and removing it from the Democrats' arsenal of political weapons, while also achieving the longtime GOP goal of big tax cuts, so much the better.

Congressional Democrats would gain by winning extra spending for favorite social programs. But many believe that with a real chance of capturing congressional control in the 2000 elections, they have the least incentive for a deal that deprives them of the Social Security issue while handing Republicans a record of achievement.

''The question is whether congressional Democrats want it to happen, and whether the White House can strike a deal with Republicans if Democrats don't want it to happen,'' said Marshall Wittman, congressional affairs director for the conservative Heritage Foundation.

The betting remains that Clinton and Republicans won't reach a compromise on Social Security, and not simply because of complex substantive conflicts.

Clinton might not want to strike an agreement with Republicans that angers core Democratic voters who want no radical changes in Social Security. He also might be reluctant to rob Democrats -- including Vice President Al Gore, a friend and 2000 presidential hopeful -- of their ability to attack Republicans for imperiling Social Security.

For the GOP, if core conservative voters are disaffected by a Clinton acquittal, conservative lawmakers might be loathe to surrender much in negotiations with the White House.

''In the best of times, it's very, very difficult for a Republican Congress and Democratic president to work out programs like Social Security,'' said Carol Cox Wait, president of the Committee for a Responsible Federal Budget, a bipartisan budget watchdog. ''You take this particular Congress and president, working with the backdrop of impeachment ... that doesn't strike me as a very good starting point.''

Without a Social Security deal, the likelihood is for either a compromise using small portions of the surplus for tax cuts and some spending increases, or a status quo year in which little is achieved.